Non-Resident Indian (NRI) is an Indian living outside India. The Term NRI, Generally, means a non-resident who is either an Indian Citizen residing outside India and includes Foreign Citizen of Indian origin residing outside India. The NRI status is legally defined under the Foreign Exchange Management Act (FEMA), 1999 and the Income Tax Act, 1961 for applicability of respective laws.

NON – RESIDENT STATUS UNDER THE INCOME TAX / WEALTH TAX ACT

The term non-resident is negatively defined under section 6 of the Income-tax Act. An individual who is not a resident under the Income-tax Act is a non-resident (generally, termed NRI). Thus, one should know the definition of a resident and if he is not a resident then he is a non-resident.

As per the Income Tax Act the status of a person as a resident or non-resident depends on his period of stay in India. The era of stay is counted in number of days for each financial year beginning from 1st April to 31st March (known as previous year under the Income-tax Act). The definition is explained in simple terms as under.

If an individual who satisfies understated both the conditions of section 6 of the Income-tax Act, then he becomes a Non-Resident.

Conditions Satisfied		Residential Status
1.	He is not in India for 182 days or more during the relevant previous year.	>> Â	If yes, then he is a non-resident. (So check the next condition.)
2.	He is not in India for 60 days or more during the previous year and he is not in India for 365 days or more during the 4 years prior to the previous year.	>>Â	­­­­­­­­­If yes, then he is a non-resident.

If you are not satisfying any of the above conditions to become non-resident, check whether following assists you to become a non-resident.

In the case of an individual on visit to India or a member of the crew of an Indian ship or a person leaving India for employment outside India, the requirement of stay in India of 60 days in condition 2 above is extended to 182 days.

RESIDENT BUT NOT ORDINARILY RESIDENT (RNOR)
A NRI who has returned to India for good is covered under the provisions of section 6(6) of the Income-tax Act. He is given a special status of RESIDENT BUT NOT ORDINARILY RESIDENT (RNOR) if he satisfies one of the following conditions:

Conditions Satisfied		Residential Status
1.	He is not a resident, as per the above provisions, for at least 2 years                                                                                                                                                                                                                               out of 10 previous years prior to the previous year under consideration.	>> Â	If yes, he is RNOR
2.	His stay in India during the 7 previous year prior to the previous year under consideration should not be 730 days or more	>>Â	If yes, he is RNOR

NON-RESIDENTS UNDER FEMA, 1999

Section 2(w): Person resident outside India (NRI) – Person resident outside India means a person who is not resident in India.

Section 2(v): Person Resident in India – Individual: ‘person resident in India’ means –

1. A person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include –

• A person who has gone out of India or who stays outside India, in either case –

1. for or on taking up employment outside India, or
2. for carrying on outside India a business or vocation outside India, or
3. for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

• A person who has come to India or who stays in India, in either case, otherwise than –

1. for or on taking up employment in India, or
2. for carrying on in India a business or vocation in India, or
3. for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period.
4. Any person or body corporate registered or incorporated in India.
5. An office, branch or agency in India owned or controlled by a person resident outside India,
6. An office, branch or agency outside India owned or controlled by a person resident in India.

The above definition is explained in simple terms for individuals hereunder.

(1)     The residential status of a person leaving India will be determined us under:

If a person leaves India for the purpose of employment, business or for any other purpose that indicates his intention to stay outside India for an uncertain period; then he becomes a non resident from the day he leaves India for such purpose.

(2)     The residential status of a person returning to India will be determined us under:

If a person comes to India for the purpose of employment, business or for any other purpose that indicates his intention to stay in India for an uncertain period; then he becomes a resident from the day he comes to India for such purpose.

In the definition, stay for a period of 182 days is also stated. However, in our opinion, the period of stay does not affect determination of status as stated in (1) and (2)

Thus if a person comes as a tourist, or for any purpose (not for employment or business in India), AND, he comes for a fixed or certain period of time he will be a non-resident.

FEMA defines a person of Indian Origin (PIO) as a person, being a citizen of any country

(a) Who at any time held an Indian Passport or

(b) A person who himself or either of his parents or any of his grandparents were citizens of India by virtue of the Constitution of India or the Citizenship Act, 1955, or

(c) Spouse of an Indian citizen or

(d) Spouse of a person covered under (a) or (b) above.

However, the citizens of Bangladesh, Pakistan, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan are not considered as PIO even if they satisfy the above conditions under FEMA for different purposes under different regulations.